We remain long the July 115-April 115 calendar spread for 6.00 and short an extra April 115 call for 3.80. Since Friday’s gap-down opening exceeded my 96.68 target, we should expect lower still prices over the near term. I won’t be at my desk Monday morning to fine-tune a defensive strategy on-the-fly,  but as of Sunday afternoon, I’ll suggest buying the April 90-85 put spread two times for anywhere between 1.50 and 1.60. That price assumes the stock is trading near Friday’s settlement price of 96.66, but it would go up or down if the stock moves, respectively, lower or higher.  Whatever the case, you should shoot for a price about midway between bid and offer on the spread.  This addition to our position is meant as a short-term hedge against immediate downside risk.  _______ UPDATE (11:59 p.m.): Lower the bid for the put spreads to 1.20, since the E-mini S&Ps are up 14 points Sunday night and threatening to ream bears a new orifice when stocks open on Monday.  _______ FURTHER UPDATE (10: 01 A.M.) :  Goldman shares led Monday’s morning’s short-squeeze higher, making the April 90-85 put spread an easy buy for 1.10. We’ll record a 1.20 price officially and let it ride. If you work the numbers, you’ll see that at April expiration our total position now yields a theoretical profit come,  almost literally, hell or high water.  To the upside, the profits would ebb away above $130,  but the stock would first need need to ascend past 115, in which latitudes paper gains on our position would fatten so quickly as to possibly warrant an early exit from it.

The recovery high made last week at 54.49 exceeded by a single penny the highest target I could have projected using the hourly  chart (see inset). Now, in order to project the even higher numbers that seem likely over the near term, we need to extend the lesser ABC pattern visible at the right edge of the chart.  This yields a new target at 57.78, a Hidden Pivot with a sibling midpoint at 55.07. As always, an easy move past the first number would imply the second is likely to be reached.

The chart shows the derivation of some short-term targets mentioned near the end of today’s commentary. Although Friday’s point ‘B’ low did not surpass a distinctive low to the left of it made the previous day, the pattern itself is sufficiently compelling in its symmetry to warrant our consideration.  Its ‘D’ target lies at 938.50, subject to a possible bounce off  949.00, the midpoint Hidden Pivot.  Based on this chart, the first hint of a decisive bullish reversal that we could identify Sunday night or Monday would come on a print exceeding 960.30. Of course, the implications would be the more bullish if this were to happen without 949.00 being reached first, or certainly 938.50.

The selloff into last week’s final bell set up a presumably corrective downtrend that projects to 753.25. That’s assuming its midpoint sibling, 762.50, is breached.  (It was, but only by one tick — not seriously enough for us to infer that its supportiveness has been compromised.) We are putting out this analysis before Sunday trading has begun, and it’s possible the futures will head higher rather than lower. If so, and if they do it without first breaching 762.50 decisively, it would then require an upthrust exceeding  780.50 to reinvigorate the short squeeze responsible for driving stocks higher last week. _______ UPDATE (11:45 p.m.):  DaBoyz have applied a rather vicious short squeeze Sunday night, although there is not a headline in sight at the moment that would nominally justify such brazenness.  So that we don’t mistake a good bluff for the real thing, let’s use  a 789.50 print as our benchmark, since that’s what it would take to turn the hourly chart unmistakably bullish. Above 789.50, the futures would have an implied minimum rally target of 809.50, a shortable target, stop 810.25,  given here earlier; or if any higher, 817.00.